On Walmart, And Who Bears Responsibility For the Poor
Note: Originally posted in Discussion, edited to take comments there into account.
Yes, politics, boo hiss. In my defense, the topic of this post cuts across usual tribal affiliations (I write it as a liberal criticizing other liberals), and has a couple strong tie-ins with main LessWrong topics:
- It's a tidy example of a failure to apply consequentialist / effective altruist-type reasoning. And while it's probably true that the people I'm critiquing aren't consequentialists by any means, it's a case where failing to look at the consequences leads people to say some particularly silly things.
- I think there's a good chance this is a political issue that will become a lot more important as more and more jobs are replaced by automation. (If the previous sentence sounds obviously stupid to you, the best I can do without writing an entire post on that is vaguely gesturing at gwern on neo-luddism, though I don't agree with all of it.)
The issue is this: recently, I've seen a meme going around to the effect that companies like Walmart that have a large number of employees on government benefits are the "real welfare queens" or somesuch, and with the implied message that all companies have a moral obligation to pay their employees enough that they don't need government benefits. (I say mention Walmart because it's the most frequently mentioned villain in this meme, but others, like McDonalds, get mentioned.)
My initial awareness of this meme came from it being all over my Facebook feed, but when I went to Google to track down examples, I found it coming out of the mouths of some fairly prominent congresscritters. For example Alan Grayson:
In state after state, the largest group of Medicaid recipients is Walmart employees. I'm sure that the same thing is true of food stamp recipients. Each Walmart "associate" costs the taxpayers an average of more than $1,000 in public assistance.
Or Bernie Sanders:
The Walmart family... here's an amazing story. The Walmart family is the wealthiest family in this country, worth about $100 billion. owning more wealth than the bottom 40 percent of the American people, and yet here's the incredible fact.
Because their wages and benefits are so low, they are the major welfare recipients in America, because many, many of their workers depend on Medicaid, depend on food stamps, depend on government subsidies for housing. So, if the minimum wage went up for Walmart, would be a real cut in their profits, but it would be a real savings by the way for taxpayers, who would not having to subsidize Walmart employees because of their low wages.
Now here's why this is weird: consider Grayson's claim that each Walmart employee costs the taxpayers on average $1,000. In what sense is that true? If Walmart fired those employees, it wouldn't save the taxpayers money: if anything, it would increase the strain on public services. Conversely, it's unlikely that cutting benefits would force Walmart to pay higher wages: if anything, it would make people more desperate and willing to work for low wages. (Cf. this this excellent critique of the anti-Walmart meme).
Or consider Sanders' claim that it would be better to raise the minimum wage and spend less on government benefits. He emphasizes that Walmart could take a hit in profits to pay its employees more. It's unclear to what degree that's true (see again previous link), and unclear if there's a practical way for the government to force Walmart to do that, but ignore those issues, it's worth pointing out that you could also just raise taxes on rich people generally to increase benefits for low-wage workers. The idea seems to be that morally, Walmart employees should be primarily Walmart's moral responsibility, and not so much the moral responsibility of the (the more well-off segment of) the population in general.
But the idea that employing someone gives you a general responsibility for their welfare (beyond, say, not tricking them into working for less pay or under worse conditions than you initially promised) is also very odd. It suggests that if you want to be virtuous, you should avoid hiring people, so as to keep your hands clean and avoid the moral contagion that comes with employing low wage workers. Yet such a policy doesn't actually help the people who might want jobs from you. This is not to deny that, plausibly, wealthy onwers of Walmart stock have a moral responsibility to the poor. What's implausible is that non-Walmart stock owners have significantly less responsibility to the poor.
This meme also worries me because I lean towards thinking that the minimum wage isn't a terrible policy but we'd be better off replacing it with guaranteed basic income (or an otherwise more lavish welfare state). And guaranteed basic income could be a really important policy to have as more and more jobs are replaced by automation (again see gwern if that seems crazy to you). I worry that this anti-Walmart meme could lead to an odd left-wing resistance to GBI/more lavish welfare state, since the policy would be branded as a subsidy to Walmart.
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Comments (510)
You should fix the title. It doesn't parse in my head, and has a spelling error.
How about?
Thanks. I caught the gramatical error on my own but somehow completely missed the spelling error. I am a terrible proofreader.
Part of Sanders' argument relies on the belief that there is a possible free lunch, here : they believe WalMart could raise wages significantly without causing the company to explode, either not harming people in ways that count to the progressive movement (decreased profit to corporations) or by arguments of comparison to CostCo, Trader Joe's, or other stores that have different structures. I'm pretty sure the math doesn't work out that way, and the realistic event chain is likely to be drastically different, but it's a very common belief. From that perspective, it's more the concept that WalMart's low wages are a bad equilibrium point established by existing laws, and because it is less costly to the state for WalMart to directly pay more at a different equilibrium, the state should force them to change their actions.
If it helps, almost all of the people opposing WalMart on this tactic have called for increase welfare states of the type compatible with what you've suggested. It's likely to complicate getting interest from the right-wing in the United States, but since the right consider work requirements one of its biggest successes there are some much more pressing issues with trying to get them to accept a basic income guarantee.
((On the flip side, I think there are some issues with BIG or BIG-like systems that make them poor solutions to gwern's concerns, but these probably exist outside the scope of this thread.))
That doesn't match my idea of what a free lunch is. I believe a better descriptive term would be the deep pockets theory.
It isnt even a question of deep pockets. Require walmart to pay each employee twice as much, and they will probably fire half of them, train the remainder better, and have customers bag their own groceries. Same total labor cost. This is generally considered better on the grounds that the people fired by walmart in this situation are not really worse of - any other employment they come by is as least as good because their current employment situation verily doth sucket hose - and the people still working there would then have actual jobs.
I see no reason to believe this would happen. May I recommend a post on the subject?
Oh really? Do you think Wal-Mart employees agree with you on that point? You're basically saying that there is no reason for anyone to work at Wal-Mart. This is... empirically wrong.
What counts as one?
You just have to make an argument that would appeal to a conservative, which I think Paine's would. Amusingly enough, Bill O'Reilly basically bought Paine's argument with respect to the guaranteed payments from Alaska's oil fund, saying "It's our oil". Paine's argument was "It's our land." It's really not a great leap.
Conservatives reject liberal arguments because they're not based in anything Conservatives recognize as justice. Your need for food does not justify your stealing my dinner. They may wish to give to charity to help the poor, but they reject having their money taken by force by the government to help the poor. It's the difference between giving a gift and being robbed.
Good points. The second link is excellent, may incorporate into a revised version of the post.
But in addition to the points it makes, there's what seems to be a questionable moral assumption here: even if Walmart could pay employees more by taking a hit in profits, why should they bear that burden alone, as opposed to spreading the cost of improving those people's lives over the wealthy as a whole through taxes? That's where the anti-Walmart crowd seems to assume something like, "hiring someone creates a (fairly) strong moral obligation to look after their welfare, above and beyond things like not cheating them."
It does seem possible that welfare changes workers' wage preferences and allows Walmart to attract laborers for less money though, doesn't it?
This seems implausible. If anything, I would expect taking away governent benefits to make people more desperate and more willing to work for low wages.
Actually, grammar, boo hiss. Just check your post title again.
Did you defect by accident here?
I'm not sure... Data point: did it come across as me being helpful?
Reflexively it came across as you being a smartass, but I quickly concluded that you were trying to be helpful. I just think you left too much room for bad interpretation.
Thanks.
(If anyone is confused, there was an extra word in my post title that I noticed and fixed before reading these comments.)
I've seen the more general claim that companies which can't afford to pay a living wage shouldn't exist. This would include not just companies like Walmart, but also small new companies and businesses with relatively poor owners.
Many of those businesses provide useful services, and I've wondered whether there's a public good argument to be made for subsidizing them rather than eliminating them.
Which is to advocate permanent unemployment for people who can't deliver value greater than a living wage.
I think you'd tend toward perverse incentives immediately if you tried to subsidize only the below living wage jobs.
Which is exactly what we're currently doing, and exactly what the left-wingers are complaining about in this situation. Rather than the State spending its money on, for instance, useful jobs programs that can directly employ people for living wages in productive infrastructure work (would that totally eliminate unemployment? No. Is it an obvious first move? Yes.), tightening the labor market, stimulating demand, and helping to pay down private debts, the State instead spends its money subsidizing poverty-jobs.
And as the Right always says, you get more of what you subsidize. In this case: sub-living wages.
I'm glad that there are some left wingers now "demanding" a rollback in the perverse programs left wingers put in place in the first place.
But as I've asked before, are there any particularly prominent liberals doing this in the US? I'm not aware of any. Prominent liberals anywhere else?
In the US, I'm aware of prominent libertarians, and even republicans who have been advocating this for a long time.
A basic-income scheme is part of the platform of the Green Party in the US. I don't know exactly what they want done with the rest of the welfare system, though.
http://www.gp.org/greenpages/content/volume8/issue3/oped5.php
My first google US hit. Promising. Not only basic income, but coupled with reducing corporate welfare. And the numbers don't seem crazy - $600-$800. I consider probably the majority of the arguments used appealing to libertarians. I didn't expect much common ground at all.
Not.
This is pie-in-the-sky promises with no hard numbers or, actually, much of any economic analysis. Instead there's a lot of handwaving about cutting government spending and corporate welfare, introducing flat tax (!), etc.
It's one page on a web site. How much detail did you expect? They do refer to their party platform. Did you read that to look for details?
They say:
Certainly a footnote would have been useful here. Maybe there is one in their party platform. But you can eyeball government spending and do some basic math yourself. $800 isn't crazy talk, if you're actually replacing other health and welfare programs.
I liked the basic principles they expressed - reduce government subsidies and tax carve outs. It surprised me to see the Greens come out in favor of that. I didn't have high expectations in the first place.
I would have to contest that in this case, the absence of evidence is the evidence of absence. On general principle, lacking special cases with adorable old grandmothers and shiny MIT graduates, what is added to the public good by subsidizing businesses that are literally not efficient enough to keep their own employees alive? How can we claim such a business is adding net value to society?
Note that I'm trying to distinguish between a subsidy and an investment. When a shiny MIT graduate needs money for his start-up, there could easily be a public good of investing in him, but in that case the public deserves shares of stock as compensation -- and will be able to realize gain from those shares as capital gains or dividends when the time comes. With Wal-Mart, the public doesn't even receive a capital stake in the business. It just pays for private actors to get rich on jobs that are, judging by their wage levels, far less efficient and productive than the ones people used to have.
It may be that no one is efficient enough to supply ,low cost low quality goods and services to people who can't (typo corrected) afford better and pay a living wage at the same time. At that point, you can shut down the business and hope that services and goods of better quality will be supplied by the government (when?), technology will improve so that workers in those businesses will be more productive so that it's possible to pay them more, leave the unattractive business in place as it is, or subsidize the business.
I'm not saying subsidizing the business is a great choice (keeping the system even relatively honest might be impossible), but I think it should be considered rather than just saying the business shouldn't exist.
If we condition our reasoning on the proposition that nobody can efficiently provide goods to poor people cheaply, then yes, I would at least claim the Proper Move (which is not necessarily easy from our status quo position) is to have certain things provided as a public service.
On the second hand, if we're already talking about instituting such a thing as a Basic Income Guarantee, then it makes good sense to do so and then remove subsidies for "sub-living efficiency" businesses. After all, with a correctly configured Basic Income, possibly plus even a small income from real business (which will be easier to come by due to the demand/money-velocity boost), even those at the lower end of the income scale should have the purchasing power to start buying, at the very least, frugal goods instead of cheap goods.
I am unaware of any such businesses. Perhaps you want to dial down your rhetoric a little bit? It looks silly.
It's not rhetoric. If a company says they cannot pay a living wage without the subsidy, then that is what such a statement means.
What constitutes a "living wage" has literally nothing to do with how much money it takes to meet your survival needs; it is an amount of money which is supposed to support your family at a "normal standard of living" in your area. The actual cost to survive is naturally quite a bit lower than that, and can be calculated with things like the 'Food Energy Intake' or 'Cost of Basic Needs' methods of establishing poverty lines.
Adding to this confusion is the fact that the Federal Poverty Line seems to be what most people use as their yardstick, despite it being an abstraction over the entire US with no allowance for regional cost-of-living differences and appears to be a relative measure of poverty based on mean income rather than an absolute measure based on the cost of survival needs.
[Edit] Surprisingly, the Federal Poverty Line does actually seem to be an absolute measure, although I still can't find exactly what goods are supposed to go into calculating it and there is still no allowance for regional price differences.
Let's assume something truly basic: a living wage covers housing, food and health insurance. That is, a worker paid a living wage will not starve, will not die of treatable disease for financial reasons, and will not be removed from work via arrest for vagrancy (because they have a place to stay).
Quibbling over definitions won't get us anywhere. Let's talk about the real issue, and if it means we have to taboo "living wage", so be it.
Do you consider it unethical to pay less than it takes to pay less than it takes to live alone, but enough to hold down an appartment with a couple of roommates? Is every treatable disease, no matter the cost of treatment, included in that, or are insurance companies allowed to draw a line inconsderation of how common or expensive a treatment is? Is that insurance pool required to subsidize riskier but likely better off (ie, older) people? Is that food required to be convenient, tasty, and nutritious, or can the wage assume the employee does their own shopping and cooking with less costly food?
What if one potential employee has a different idea of what it takes to live than others?
I have no problem tabooing "living wage" in our discussion, but it is important to remember that the word has an actual definition in policy terms; if we talk about paying Walmart / Sam's Club employees a living wage that actually means one very specific thing in terms of how much money they are going to get, and it's not a particularly intuitive amount at that.
But that's a debate for the talking heads; if I understand you correctly, we just want to know if someone working at Walmart would starve without public assistance.
Let's assume for the moment that the Federal Poverty Line is the number we're trying to avoid here; above that you're still in a shitty position but you are not actually starving (technically you're probably not starving below it either, but I can't find good Cost of Basic Needs data for the first world). An average Walmart employee makes about $17,600 a year plus minimal benefits for 35 hours of work a week, which is piddling but also enough to support yourself and one other person by federal standards ($15,510 a year). With another 15 hours a week of work in a second job at the federal minimum wage (remember, most states have a higher minimum) a Walmart employee can support a family of four ($23,550 a year). This is also assuming only one person in the family of four is working, which is a bit of a spherical chicken these days.
So without any public assistance at all a single person with Walmart as their primary job can definitely support themselves and another person at a level above the Federal Poverty Line, and can support a family of four at that level with an additional part time minimum wage job. It would be an uncomfortable paycheck-to-paycheck kind of existence, but all of their basic survival needs would be met out of their own income.
Now don't misunderstand me; I'm not saying that Walmart is morally in the right here, or that their employees shouldn't have a more comfortable and secure way of life. On the contrary, I think it's disgraceful the way real wages have fallen in the last half-century and how many good blue-collar jobs have been destroyed by our ludicrous trade policies. But the question of whether Walmart employees would be starving without EBT is an empirical claim and one which is easily disproved.
It is rhetoric because "living wage" in the US is far beyond what's needed to keep people alive. People who don't get paid a "living wage" do not drop dead in the streets from malnutrition and exhaustion.
Can we drop the pointless definitional agreement and just find a study specifying what wage-level is necessary to keep people from dropping very preventably dead or being arrested for vagrancy?
I am not particularly interested in a study. At one point in my life I was poor. Very very poor. I have quite a good idea of how much money do you need to survive in a US city. Hint: it's far below what is usually called "a living wage".
This isn't corporate welfare to Walmart or it's employees, it's corporate welfare to our regulatory protected medical industries and guilds.
The vast majority of the supposed "welfare" spending for health care is paid in rent seeking and tribute to the regulatory state and the vested interests they entitle.
I thought this was generally a good post, but I suggest linking to some serious research rather than a Krugman blog. In his article he links to a survey article, and there are many other good ones. These contain the same information, but lack the unnecessary partisan attacks - "Republican leaders clearly feel disdain for low-wage workers."
Eh - Krugman is nice and concise, and popularizers like him are where I actually get my impressions of the empirical evidence of minimum wage laws. Also as far as I can tell he's right about Republican leaders.
And completely mind-killed about politics. (I'm giving him the benefit of the doubt there.)
Also, notice his post crisis behavior. First he makes concrete predictions about what will happen with and without stimulus (things will be somewhat bad with stimulus and even worse without stimulus) meanwhile his opponents predict the stimulus will make things worse. Then the stimulus happens and things are even worse then his without stimulus prediction, his conclusion: "we didn't stimulate enough".
There is strong agreement among economists that the stumulus worked.
That is not at all relevant to Eugine's point, which is a conjunction between predictions ahead of time and beliefs after the fact. If he holds now that the stimulus worked, he must hold that has previous predictions were badly wrong. Does he admit that? Moreover, he must reduce his belief in the efficacy of stimulus, even if his assessment of the state of the economy shifts more. Is he explicit that he has stronger beliefs about the efficacy of stimulus than about the future of the economy? And these economists that today have strong agreement, what did they predict ahead of time?
(I'm assuming that Eugine is correctly describing Krugman. But you didn't object to that.)
None of the major political ideologies are particularly consequentialist in the way they approach policy. Progressives by and large see the world through the following lens: There are some people who are oppressed and others who oppress them. Government policy ought to focus on emancipating the oppressed and punishing/overthrowing the oppressors. Criminal Justice: white people oppressing brown people. Abortion: Christian men oppressing women. Foreign policy: America oppressing the rest of the world (unless it's America saving some oppressed foreigners from an oppressor). Housing policy: landlords oppressing tenants. Labor: captital oppressing unions. Taxes: the one percent oppressing the 99%. Marriage equality: straight Christians oppressing LGBT people. Progressives aren't generally concerned about utility: they're concerned about justice. Even the Animal Rights movement, essentially founded by arch-Utilitarian Peter Singer is focused on the class relations between animals and the humans who oppress them.
In this case, the oppressors are wealthy business owners who are exploiting the labor of the poor and helpless AND exploiting the rest of us by placing the burden for care on taxpayers.
I know this summary of liberal thought probably sounds strawman-like. I don't mean it to be taken as a summary of progressive arguments on these issues. There are good arguments for progressive positions, many of which I agree with. Rather, this oppressed-oppressor lens is just the initial conceptual frame most progressives have in response to any political issue.
I'm not saying there can't be real instances of oppression or that ending oppression doesn't increase utility. But when all you have is a hammer, everything you see looks like a nail etc. Conservatives and libertarians have similar non-consequentialist frames through which they view every issue. See "The Three Languages of Politics.
The extent to which any ideology can be "true" is mostly just the extent to which their central heuristic is useful and actually describes the world. There is a minority of libertarians and an even smaller minority of progressives that actually appear to mainly care about the consequentialist effects of policy. They happen to over-represented here, but they're pretty unusual in the rest of the world.
BIG + no other welfare state and no minimum wage is probably preferable to what America has now. I sort of worry about how hard it would be to hire someone if the BIG got too large but it probably couldn't be worse than trying to hire someone in an environment where they could lose their house, health coverage and disability check if they begin making too much.
You have to distinguish between what they say and what they do. The major ideologies are considerably more consequential in what they do than in what they say.
You'll have to explain what that means.
My interpretation:
Politicians try to say things that appeal to as many people as possible to maximize votes. Once they're elected, they can be more specific and thus more consequentalist about what they do, since for the average voter, verifying what they do is more laborious than listening to what they say.
There is no hidden meaning here.
In politics there is a major difference between what politicians say and what they do. This is a rather straightforward consequence of the set of incentives they have to deal with. There are, of course, limits to the divergence of the words and the deeds, but these limits are pretty lax.
Are you implying that what happens is generally what was intended (by someone) or that policy out comes are due to wrongly anticipating consequences, rather than simply neglecting to?
I don"t think it"s a complete strawman. Marx basically says that every social conflict is about the struggle between oppressor and oppressed.
Not everyone who's political left subscribes to that ideology but it's certainly something that real people believe. It deeply buried in the core assumptions of socialist thought.
That may be. Mainly, I just didn't want to argue with any progressives that might be offended.
Marx was a liberal?!
"Liberal" is a funny word, it had quite different meanings through the history and even now tends to mean different things on different sides of the Atlantic ocean.
Quite true, but can you identify any reasonable interpretation of "liberal" that fits Marx nicely? As far as I can see, none of the usual meanings of liberalism I can think of (classical liberalism; neoliberalism; squishy, mainstream, contemporary welfare state left-liberalism) sum up his ideology well.
It shouldn't be particularly difficult to establish a path from Marx to "contemporary welfare state left-liberalism". It would focus on hostility to capital and the need to help the oppressed.
Marx, of course, would barf at contemporary welfare state, but he's dead so we can conveniently ignore all that :-/
Sure. But the path from Marx to contemporary welfare state left-liberalism is sufficiently long (and with enough branches!) that using one as a representative of the other is dubious at best. As you say, Marx himself would probably take a dim view of CWSLL, if he were around to witness it.
Yeah, I agree. People calling contemporary progressives "Marxists" are usually just looking for a derogatory adjective.
However there are certain similarities and the connection between Marx and CWSLL can be made -- it will be twisting and turning, and will require a fair amount of bending and averting eyes -- but it will probably pass the laugh test. I don't think that this connection is important or that pointing it out is useful, still, it's not quite the young-earth theory.
You could probably do it cladistically too. Sorel blasts Jaures as a social democrat (which AFAICT he was) in Reflections on Violence, but Jaures read and was influenced by Marx.
On the other hand, Social Security was explicitly inspired by Bismarck's successful attempt to buy off the socialists... but on the other other hand, many political figures at the time, including some in high places in FDR's administration were, well, not entirely unsympathetic to the Soviets.
Marx certainly wasn't a liberal, but many liberals have been influenced by people and movements far to the left of them; it could be argued (though I'm not good enough at history to argue it well) that the oppressor/oppressed mindset is one such influence.
Just think of "The Communist Manifesto" as being a horrible warning, like Orwell's 1984, rather than a how-to guide. ;)
American often equate liberal as being left. If I read someone on the internet writing liberal, than I usually don't think they mean the word in it's traditional meaning.
Marx made no bones with categories of "oppressor" or "oppressed" whatsoever. He dealt in economic classes defined by their relation to the means of production: worker and capitalist. He actually despised the criminal lumpenproletariat.
According to Marx capitalists do oppress their workers.
Political ideologies are big squishy categories that contain more consequentialist and less consequentialist strains. So I think that's the wrong way of looking at it.
E.g. amont libertarians, there are those who focus on supposed good consequences of libertarian policies, and those who focus on arguing coercion is always wrong even if it leads to good consequences. And among progressives there are people who are basically as you describe, and people like Matt Yglesias and myself and I think Yvain (I think it's fair to call Yvain progressive).
I mentioned those strains. But they're a very small minority-- over-represented among wonks, bloggers and people smart enough to be in your social circles-- but still small. Yglesias drives people to his left nuts with his stuff. And you and Yvain are not representative progressives for what I think are obvious reasons, right?
You can put me in that category of progressive too (though I like left-libertarian or liberaltarian as well). We should also be skeptical that we are actually progressives for consequentialist reasons and not merely coming up with consequentialist rationalizations for our progressive intuitions. Disagreeing with non-consequentialist liberals seems like a nice start, though.
How small that group is, sort of isn't the point though. The point is that one dimension along which you differ from many other progressives is whether you look at policy chiefly through a lens of consequences or a lens of oppressor-oppressed. As such it is unsurprising that you find yourself disagreeing with progressive talking points from time to time.
Fair enough. It is true that most people, regardless of their politial ideology, are not consequentialists. But this looks like a case where failing to look at the consequences leads people to say silly things.
I like your whole comment, but disagree with the first sentence.
Apart from reading about it explicitly on LW, I was also able to approach politics as less of a mind-killer once I realized that different ideologies approach issues believing different outcomes would be ideal. But neither side realizes that (or how very different "ideal" is to each), so one just says, "ABC will work! XYZ is crazy!!" and the other says, "What?! ABC will never work! History shows XYZ is clearly the best policy!" Each side means something different by "work", and so spiralling mind-kill ensues...
Actually, I've found my best friends, with whom I end up discussing politics with, are very consequentalist, and care very much about what ends up "working best". Those who disagree with me simply don't define "working" or "best" in the same way I do, and so we really ending up talking past each other and giving each other funny, mind-killed looks.
For instance, as a liberal, I concede de-regulation is better for maximizing economic growth and so I concede that right-wing fiscal policy is "better" to that end. But I'm admittedly more interested in anti-oppressionizing the world (a la your strawman progressive) and providing the basis for relatively economic equality than I am in max growth, so I am for more regulation and wealth redistribution to that end. We each believe the best possible world looks differently, and so we are asking different questions when we ask the same question. But we are approaching the issue from a consequentialist standpoint.
And so my righty friends still think I'm a bleeding-heart weirdo and I think they are greedy and heartless ;) ...but at least we've moved our discussion passed arguing over definitions without realizing that's what we were doing.
What do you mean by this? Would you support policies that make everyone worse of if the resulting distribution is more equal?
It would depend on what you mean by "worse off". I wouldn't define it as less wealth, per se. Though even if I did define it in strictly economic terms, I'm not sure any policy or redistribution could "make everyone worse off", since a large portion of the world has zero wealth.
Look beyond the short term.
Okay. Please help me understand a scenario where everyone was worse off in the long term because of the redistribution of wealth.
Take a simple scenario of two cities -- one is high-tech and one is a big stone-age village in the hills of New Guinea. The high-tech city is much richer.
You take half of the city's technological bounty and bring it over to New Guinea -- you redistributed wealth.
Fairly quickly the technology becomes completely useless in New Guinea, but the villagers liked it for the short period that it worked -- so they abandon working in the fields and build something resembling air strips with mock airplanes sitting on them...
I must be misunderstanding. I can imagine many hypothetical scenarios where redistribution of wealth would have a net negative effect, in terms of technological advancement, economic growth, etc.
In the globe we currently inhabit, there exists some huge chunk of people who live in utter poverty and, therefore, have no wealth. In strictly economic terms, they cannot being doing any worse than they are right now. Therefore, any redistribution of wealth will either (a) not affect them or (b) benefit them. This seems to me to be true in the short term, as well as the long term.
Lumifer's point is that if you do an extreme enough redistribution, what will happen is that the whole technological system will just collapse.
Well, my point was more limited -- in the example the rich high-tech city lost wealth (which they will replenish eventually) and the poor village didn't gain anything.
You can get into a deeper analysis which would involve e.g. motivations and incentives (what happens to people who get used to living on free handouts?), necessary concentration of capital (a semiconductor fab costs a few billions of dollars, who will build it?), etc. but it's a large topic.
That is not true. A small value does not equal zero. The number of people who literally have nothing is vanishingly small. Almost everyone who lives in utter poverty has some wealth, just little.
This is not true either. Consider a country like Haiti where a large chunk of population is very very poor. A few years ago they had a large earthquake. Beyond the loss of life, you are arguing that the poor did not become worse off in the aftermath of the earthquake. I don't think this is so.
Since you are talking about a large number of people, presumably you have in mind somebody like Chinese and Indian peasants. Do you really believe they "cannot being doing any worse than they are right now"?
From my Wikipedia research, there were 923 million undernourished people in the world in 2008... where undernourishment is (roughly) a cumulative or average situation where the average person is not consuming enough nutrients to remain in good health while performing light physical activity.
Of course, I can dream up a "worse" situation. (Like they are malnourished and in a deep hole.) But I think that is beside the point. You have ~12-15% of the global population that is progressively dying via malnutrition. Any way which you define "wealth" in which these people 923 million people have non-zero wealth values is fine. I guess I'd technically agree. But practically, these people seem to have maxed out the possibilities of "worst", short of being in a deep hole. Or being in a natural disaster.
My view of wealth has something to do with abundance beyond the minimum requirements for living. If I have a ham sandwich, it's just hard for me to count that as wealth. And I guess a hungry guy with one ham sandwich could be doing worse in your view, correct?
Yeah, on reflection 'consequentialist' is probably too broad.
The other half of this is that you and your friends presumably don't assume that those with opposing political views have the (real or hypothesized) ill effects of their preferred policies as primary goals.
Well done. This is one of those things I'd never thought of, but is obviously correct now that you point it out.
I don't think this needs expansion. Brevity is a virtue, and this does a good job of explaining the core idea quickly and accessibly. If you run it through a spellcheck and spend fifteen minutes making the prose flow more smoothly, I'd consider it ready for Main.
Your analysis of the short-term effects is correct, but the long term effects depend on whether "low wage workers" are permanently so. Sometimes people condemn Walmart jobs as "dead-end" and that is getting at the right point.
I've heard the claim that Costo and Sam's Club (ie, Walmart) are very similar, but Costco is famous for paying its employees twice as much. But this doesn't come out of profits - Costco spends the same amount on labor, employing half as many people, twice as productive. If Walmart could make its employees twice as productive, that would be great for society, though in the short term it would lay off half of them.
If the productivity of people is unchangeable, then Walmart is doing society a valuable service by providing a niche to people capable of no more. But if Costco employees are more productive because Costco trains them, then Costco is doing a valuable service by improving their productivity. In the first case, we want Walmart to win because only a few companies like Walmart can make use of the least productive workers. But in the second case, we want Costco to win because it is making use of the same people, but making better use. But we observe that they are evenly matched, so there's no reason to expect either of them to win, let alone the right one. Eventually in the second scenario Walmart loses, not because Costco wins, but only when the Costco model expands into new industries, producing more training, bidding up the salaries Walmart pays.
In the particular example, I believe that Costco is not increasing productivity, but merely identifying more productive workers, and that Walmart is able to employ people that few other companies can. In general, I think the economy is generally trending away from investing in low-end worker productivity, which is terrible. In theory, raising the minimum wage should put pressure against this, but pressure to create new companies that work differently is less certain than pressure shifting the balance of power between existing companies.
(Also, there's a third scenario where Walmart provides the training, but the productive workers graduate to Costco. I certainly think Walmart is providing filtering, letting productive people build up a resume to show to Costco; I'm less certain of whether it improves the workers.)
I worked at Walmart as a teenager. Walmart does a lot of training, but the simple fact is that they work with people who have a lot of attitude and discipline problems (like the teenage me) that would make them unemployable elsewhere.
I get the impression that the real problem with health care specifically is that we are keeping sicker people alive longer with more effective (and expensive) treatments, and this increased cost is not being reimbursed by valuable work done by those sick people. In simplistic economic terms it is not cost-effective to keep a certain class of people alive or healthy. Is that analysis evil? I think so; automation will almost certainly put 99% of unmodified humans into that class at some point in the future. The practical effect is perhaps what we are seeing; Walmart and McDonalds can't afford to pay enough money to keep their minimum wage workers as healthy as a Silicon Valley tech worker or a NY banker, and the difference in achievable healthcare outcomes between a low income worker and a high income worker has increased significantly in the last 50 years. Remember when cancer and heart disease and even diabetes used to kill people (rich or poor) quickly and cheaply?
Guaranteed basic income or minimum wage aren't sufficient on their own to solve the problem. Total production efficiency (or at the very least medical/health care efficiency) has to increase at a rate equal to or above the rate that medical treatments and medical technology advance. When automation unemploys people from McDonalds and Walmart they will still get sick. at roughly the same rate, and with the same diseases. The total cost of providing healthcare will not go down, barring increases in efficiency, and the cost of welfare would increase. Given those assumptions it seems like the best action is to allow McDonalds and Walmart to continue to employ people at existing, sustainable wages and leave them on welfare, and implement as much of basic income or increases in minimum wage that the rest of the economy can bear to prepare for widespread automation, and focus heavily on automating medical care to improve its efficiency.
That's a problem. The international statistics suggest it's not the problem -- health care expenditures don't correlate particularly well with longevity at the high end.
Cultural tendencies towards proactive vs. reactive care might be responsible for part of this, but I'm unaware of any high-quality research on the issue. On the other hand, I haven't been following it closely.
Evil? It depends on your moral code. However, I would certainly note that allowing the economy to kill people should be considered strongly contradictory with normal LessWrongian social goals like abolish effective scarcity and make everyone immortal.
People are dying for economical reasons all the time.
In most cases, when a person dies, there was an option to save them. Killed by a disease? With enough money, best doctors and medicine could be bought to save them. If that is not realistic, with some money they could be at least cryopreserved and given some chance of living again. Killed by a murderer? With enough money, there could have been a policeman standing on that street to prevent the crime. Killed by a random falling object? With enough money, something could be there to prevent the object from falling on someone's head. Killed by an obesity caused by unhealthy life style? I am sure that with enough money, something could be done to prevent this, too.
Thus speaking about not allowing the economy to kill people is merely an applause light. People die for economical reasons today, and they will also die tomorrow. The only choice we have is to move more money to some area, by taking the money from another area, so we can save some people from dying by cause X at the expense of more people dying by cause Y; and we can hope that by doing some we have increased the total value (total quality-adjusted life years, or whatever is your favorite metric).
In a perfect world, an answer to "is it worth spending $ 1 000 000 to save this person's life?" would always be yes, because in the imaginary perfect world you can always get the $ 1 000 000 without taking it from somewhere else. In real life we have choices more like "is it worth spending $ 1 000 000 to save this person's life? or should we instead let the person die and use the money to save lives of other ten people?". (And if you wish, you can make it more complicated by assuming that the first person is a Nobel price winner in medicine and invented a cure that saved millions of lives, but these days he is too old to invent anything more; and the other group contains one great poet, but also one murderer, et cetera.)
If this comment was made with the implicit intent and understanding of money as an abstraction of the resources we have available, I don't see why it hasn't been upvoted through the stratosphere yet.
It really, really hurts me when I see that the best options being offered by even the brightest minds and best visionaries in a given group all revolve around better redistribution of these million dollars, and not one of them asks "What if we could create a world where we don't have to take that million dollars from somewhere else?". Because I'm pretty sure that if someone cast Greater Wish and made everyone in a large rich country (e.g. USA) work together on this, it would happen.
I have the opposite perception. For the near and medium term, resources are finite and that means we have to make allocation trade-offs. When we're talking about safety and health resources, those decisions are going to have consequences for who lives and who doesn't.
I can imagine a society without resource shortages. But I can't imagine building it even with universal agreement and cooperation. You don't get a technological singularity just by wanting it.
Ah, I may have been overly abstract or generalized.
I agree with your assessment of the situation. What I would like to see is novel approaches at making it so that resource shortages that can be eliminated are eliminated. Cliché example: We are mere years away, barring opposition from invested parties and given continued funding and enthusiasm, from a fully automated transport and logistics infrastructure. AKA self-driven cars & trucks. (please leave argumentation of those two premises for another discussion - a Greater Wish or the circumstances I discussed in the grandparent would make those premises true for the purposes of this discussion)
Current wisdom is that these things should be left alone and "let the free market sort these things out" - which means, essentially, that we are to let shortages keep happening, because the margins of the free market will keep producing availability issues and shortages even on things where we can match supply to demand with positive net value after taking into account resources diverted from elsewhere (raw materials and human work time are the only relevant ones here once you trim the fat and all humans are fed, I believe).
So to come back to the virtual example of the million dollars, what I'd like to see is less people asking "How do we decide who to heal, cure and provide treatment for?" and more people asking "How do we dramatically increase the abstract availability and supply of medical resources and is there some way to do this without draining human resources from other industries?"
To craft a silly image, imagine an automated cold & flu treatment machine that looks like an ATM, is placed strategically to cover as many people as possible, does some basic automated symptom assessments to make sure it's cold & flu, and provides a printout and some dosage of medication.
Once the setup is done, all that's left is raw materials and human work to maintain the system, the human work is of a non-expert kind so not currently in any kind of shortage, and not planned to be given advances in automation, and the raw materials would be in the same ballpark as that already being consumed. An overall net gain, and the supply becomes directly tied to demand and only capped by raw materials, which in this example I'm led to believe are far more ample than what is needed to meet demand. An ideal scenario, disregarding the ridiculous feasibility issues with this scheme.
All this to say: There's too much Utopia/Reality dualistic thinking, where there are either No Resource Shortages or Limited Resources Which Require Free Markets, and nothing in between. Sure, eventually when you trim enough fat everything comes down to a few key raw resources, which could be abstracted into "money" if you tried really really hard, but those are, in most practical cases I've thought of, not the bottleneck.
What do you mean with "best doctor" in this case. Do you mean more than just a doctor who know which clinical trial says which drug is best for a particular condition?
There no straightforward way to throw money at the problem of obesity to solve it. Gastric bypass surgery might work to reduce the weight but it has it's own disadvantages and I wouldn't call it buying health.
I don't think that there are many cases where you can simply buy a life in a country with a health system like Germany for $1 000 000.
You're leaving out the possibility of needing to shuffle through a number of doctors to get a competent diagnosis. It's a fairly frequent problem in the US. I don't know how common it is in Germany.
Typo: I think you mean disadvantages.
Do you have a source that describes how US millionaires go through 10 doctors to get a correct diagnosis? I think most of the time in Germany what stopping people from going to more doctors isn't financial but the fact that they trust a doctor.
Fixed.
I don't have a source for how many non-millionaires in the US have to go through a number of doctors to get a correct diagnosis-- I just know a fair number of people (some online-only) who've done it. They probably have average or better incomes, though it would be worth checking. It isn't a cheap process, at least in terms of time, and I'm guessing that poor people are less likely to have the self-assurance to do it.
Your assumption is that the difference in Germany is in the degree of trust in doctors rather than better diagnosis?
That is not true because of one simple observation: eventually everyone dies.
Millionaires and billionaires die, too, even with the best of doctors and security guards.
Does that have anything to do with Walmart or health care for workers?
Whatever your moral position is, government benefits to low-income workers are a subsidy to their employers.
If the government awarded benefits only to the unemployed, many low-income workers would find preferable to quit their jobs if their employers didn't increase their wage. Since employers need employees, employers would find preferable to increase their employees' wages enough that they don't need government benefits.
The net effect would be a redistribution of wealth from employers (especially those who use lots of low wage labour, like Walmart) to the government (and hence to taxpayers).
On the other hand, increasing government benefits to low-income workers would redistribute wealth in the opposite direction: from the government to Walmart-like employers.
Note that neither policy significantly affects the welfare of low-income workers, since their effective purchasing power remains approximately the same.
Therefore, if you think it is morally preferable to redistribute wealth from Walmart to the taxpayers, support unemployed-only benefits (and/or minimum wages), if you think it is morally preferable to redistribute wealth from the taxpayers to Walmart instead, support guaranteed basic income and/or other low-income workers benefits.
...or support government benefits directly to Walmart.
That's an interesting point against Basic Income Guarantees. Thank you for making me consider it.
But the real problem is caused by the government giving more benefits to unemployed people than to employed people. It's hardly a serious ethical critique of Wal-Mart to say that its actions are harmful given the weird distortative incentive-misaligned modern economic world.
They would also hire fewer employees while doing so.
Why?
That's incorrect. Basic income is provided to everyone, even to those who choose not to work. Perhaps you were thinking of the Earned Income Tax Credit, which is provided only to low-income workers.
Therefore it allows employers to pay lower wages.
Even so, payments to those who aren't working can't reasonably be classified as 'redistribution of wealth from the taxpayers to Walmart'
I'm not sure that the drop will be as much, though - if everyone has a basic income, some people who are now driven to work despite hardship would not be so driven and could finally quit. Those who do work will not need to compete with them for jobs. ALSO, those on basic income would be able to buy things they presently cannot, which would increase the demand for labor further.
...only if the workers don't mind lower wages (such as in a Silicon Valley startup). See, among many other benefits, basic income can serve as a permanent strike fund for those who are still employed. These employed strikers would not receive anything from your solution of "unemployed-only." Furthermore, your targeted solution can be demonized as "lazy-only" and cut by politicians. Look at stigmatized food stamps today. Such drastic cuts are very unlikely with a non-stigmatizing basic income provided to everyone.
On a related note, GiveWell appears to be removing Against Malaria Foundation as their top charity, making GiveDirectly their new top charity. Donating to GiveDirectly may help legitimize the idea of an unconditional basic income. I don't think basic income is as important as mass cryonics, but I still defend it in my upcoming "cryonics and basic income for everyone" website. Here's hoping I finish the website someday.
In terms of actually existing politics, which do you think people in general would dislike least: subsidizing would-be freeloaders with taxpayer money, or using that same taxpayer money to hire people (or subsidize hiring people) to do largely unproductive jobs that the market wouldn't pay them a living wage to do? There seems to be a general feeling that it's wrong to let people (figuratively) starve, but also that it's bad to give people things they don't deserve.
If the answer is "I think people in general would rather make people work for their money, even if the work itself isn't actually worth what we're paying" then we might as well let Wal-Mart do the hiring rather than have the government do it directly.
(Aside: The textbook example of unproductive make-work is digging ditches and filling them in again. A slightly less obviously ridiculous way to employ low-skilled workers is as "taxi drivers" for people who would rather spend their daily commute doing something other than driving but wouldn't go to the expense of hiring a driver themselves. After all, driving is a skill that most adults actually do have...)
I would actually say it's definitely better, if you're stuck subsidizing someone's survival, to subsidize them as a "freeloader", aka: someone with actual leisure.
If you're thinking that this is an incentive against the work-ethic, yes, it is. I believe our culture currently overemphasizes work-ethic, and this is all part of my sneaky evil plan to convince people to value work less.
Imagine that you are designing a Prisonner's Dilemma game. When all the numbers are ready, you have an additional option to increase the reward for defecting when the opponent cooperates. Would you do it?
If you expect that the player's future decisions are already fixed and your numbers will not change them, then increasing the reward adds more value to some players, while removing value from none. Thus it would be good to increase the reward.
But if you expect that people look at the payoff matrix and choose accordingly, increasing the reward for defecting will lead to less cooperation. By increasing the reward for defecting, you are reducing cooperation... and it's not obvious what will be the result.
Now let's add another complication. Let's assume that some players' voting mechanisms are broken, so they always vote to defect, and are unable to change that. It feels moral to punish those who defect voluntarily, but it feels immoral to punish those who merely randomly received a broken voting mechanism. -- I am speaking about people who are too stupid to do the kind of work that is important in a modern society. As opposed to people who could do the work, but are too lazy, if the system allows them. Both of them are mixed in the category of unemployed, with no easy way to distinguish between them.
Unfortunately, trying to set the numbers so that no one chooses this option voluntarily, and yet those who don't have an option of escaping it are treated well... seems like a contradiction.
(There is a sci-fi "Limes inferior" about a society where all people have to do public IQ tests, and those above some value are legally required to work, while those below the value are not. Everyone gets a basic income, the smart people get a bonus for being smart, and the working people get another bonus for work.)
I think I'm missing your point.
It seems that one approach to this is for me to treat everyone well whether they work or not, and for me to provide additional incentives to people for doing the kind of work I want people to perform. This admittedly does not have the structure of a Prisoners Dilemma game, but I'm not sure why the PD structure is important.
If I find that some people who are capable of doing that work consistently choose not to under my incentive structure, I can experiment with my incentive structure... different people are best motivated by different things, after all.
If despite that I still find that some people who are capable of doing that work consistently choose not to... well, that means less of the work I want people to perform will get done than if they chose otherwise. Which might be a huge problem, if that work is much more valuable than the stuff they choose to do.
I have a bunch of options at that point. E.g., I can figure out other ways to get that work done (e.g. automation). Or I can figure out ways to force people to do that work.
Or I can rethink my initial conditions and stop treating everyone well whether they work or not... I can instead treat people well if they do the work I want done, and poorly otherwise, and count on that differential treatment to provide the missing incentive.
But that last option is far from the only option, nor is it clear to me that it works better than the alternatives.
This seems to me almost what we have now. Yes, there is a problem about defining "treating well". However well you treat one group of people, if you treat everyone else better, the former will complain. These days in first-world countries the unemployed people are treated much better than an average working person was centuries ago. But that's irrelevant. We see that they are treated worse than other people are today, therefore they are not treated well.
Even if you start treating poor people much better than they are treated now, even better than the average people are now, just wait 10, at most 20 years, and they will start comparing you to Hitler, if they see that someone else is treated even better.
I agree that we should experiment more. Preferably many different experiments in smaller regions, so it is easier to stop things when they go horribly wrong. Seems to me a good first step would be giving more independence to regions; decentralizing the state power.
Yup.
I'm all in favor of experimentation.
And if we're already experimenting to the limits of our existing regional independence, such that increased independence will relax the rate-limiting constraint on experimentation (which I doubt we are, but is I suppose possible), then yes, increased regional independence would make sense as a next step. Though perhaps it's best to do so in a small region, so it's easier to stop things if it goes horribly wrong.
Of course, if we believe for_ other_ reasons that decentralizing state power is a good idea, then we should endorse doing so for other reasons, but that's something of a nonsequitor.
I used to have rock-paper-scissor preferences for that kind of thing (if A = “John is paid to do nothing, i.e. basic income guarantee”, B = “John is paid to do something useless, e.g. digging ditches and filling them again”, and C = “John is not paid at all”, I preferred B to A to C to B). I realized that and forced myself to resolve this when reading this post and its comment thread.
I don't understand why you are worried that the anti-wal-mart meme would cause anyone, let alone a leftist, to oppose GBI ... a GBI reduces the incentive to work for low wages. If it's true that welfare is benefiting Wal-Mart and other low-paying companies, then the reason is that in the current system you lose your benefits if you don't get a job. This is just the natural consequence of our method of imbedding an incentive to work within the welfare system.
I suppose someone who didn't like GBI and thought work-dependent welfare was an acceptable alternative might be driven to oppose welfare in addition to GBI upon learning about this side effect.
This post is almost the epitome of what I don't want to see on LessWrong, Discussion or not.
EDIT: This post was moved to Main after I made this comment. This makes me like it even less.
It has a reasonable argument at its core: giving government benefits to low-income workers effectively means subsidizing the companies that pay low wages (and there are huge companies profiting from this). That's an irony, because even the voters who want to give money to low-income people usually don't want to support companies that profit by paying low wages. Giving money to low-income people regardless of their employment (via basic income or otherwise) would have a similar result, except for requiring people to work for companies that profit by paying low wages.
It has a mindkilling title: "evil" is a loaded word, and even if we insist on using it, why not use it instead on politicians and voters who enable this behavior? The problem is, each tribe has their preferences about who should be called evil, therefore the usage of the word necessarily follows the party line.
The mindkilling effect of politics is not just that it's difficult to write a reasonable article about politics... but that even if you succeed to write a moderately reasonable article on a political topic, it is still very likely to cause unreasonable comments in the discussion. -- This is why we need more strict criteria for political articles. As it is, it is in my opinion barely okay for the Discussion, and unfit for Main. I upvoted it in the Discussion, because I appreciate the information (I am not American, so I learned something new about Walmart, which may help me understand the American culture better), but would downvote it if it moved to Main.
This reminds me of an advice for authors: don't tell me, show me. Specifically: write an article in a way that does not scream your tribal affiliations, and then you will not have to excuse yourself.
"Evil" seems a fair description of how some people seem to view Walmart, though I'll probably remove it anyway on re-write.
As for the rest, I'm just going to drop a link to what I've previously said about "politics as mindkiller." (And say how depressing it is that so many people in this community seem to have given up on doing better.)
That's a big “except”.